13 March 2008

Industry slams hike in aviation duty

The travel industry has reacted angrily to Government plans to increase aviation duty.

In yesterday's Budget, the Chancellor announced that the forecast total tax revenue from the new aviation duty, which is due to replace Air Passenger Duty in November 2009, will be increased by 10% in 2011-12, the second full year of operation.

Guild of Travel Management Companies chief executive, Philip Carlisle, said the move was "another short-sighted tax grab by government".

"The Treasury's press notice supporting the Budget Statement explicitly states that the purpose of this tax increase is to raise money to pay for public services," he said.

"GTMC acknowledges that aviation should bear the cost of its emissions but we believe strongly that the revenue raised should fund either environmental projects or be used to develop much-needed transport infrastructure.

"Aviation should not be used as a means for the Chancellor to raise general revenue to help him balance the books."

Tom Jenkins, executive director of the European Tour Operators Association, warned the increase in the 'visitor tax' will hit incoming tourism, particularly for long-haul visitors.

"The amount of tax and fees paid by European visitors to the UK is now 65% higher that the average level of tax and fees they would pay to visit the key competitor destinations of France, Spain, Italy, USA and Australia," he said.

"For visitors from long-haul destinations the amount of tax and fees imposed on visitors in the UK is now over 90% higher than the average of the other destinations while, for visitors from the 109 countries that require a visa to enter the UK, the total cost of taxes and charges now stands at more than Ã&#pound;200 per person.

"In the context of a declining share of world tourism, the last thing the UK needs is any more tax on travel."

Meanwhile, Cheapflights general manager of UK Francesca Ecsery said the money raised should not go straight into Government coffers.

"Cheapflights supports moves to reduce aviationÃ¢â¬â¢s already small global emissions footprint 2% globally set out in the Sustainable Aviation Report.

"However, it strongly believes the additional tax revenues should be applied to achieving the stringent 50% noise, CO2 and NO2 reduction targets set out in the report by and for the aviation industry for 2020."

But the company said it welcomed the ChancellorÃ¢â¬â¢s other Budget initiatives to speed up passenger transit through Heathrow using biometric technology.

"The airport is an essential component contributing to the UKÃ¢â¬â¢s future economic health and improvement is urgently needed," Ecsery added.

"Current criticism of difficulties for passengers at Heathrow are justified and need to be addressed."

By Bev Fearis

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Your Comments (4)

Displays of indignation misplaced...

I am with Raoul Bianchi on this one. I continue to be amazed that people still consider aviation to be a soft target for the Govt.. It isn't - its just one of many, ever heard of the &#pound;25 congestion charge? Perfectly reasonable in my view. The plain facts are that aviation is growing unsustainably, and swalling up scarce resources in the process. Wake up people! the world is changing.

By Gary Phillips, Monday, March 17, 2008
Greenhouse gas or hot air?

The aviation industry is right to complain that it is being picked on by the climate change lobby. Air transport produces no more than 5% of CO2 - fact. Yes it's growing fast - fact. BUT - even if it tripled in size, which it won't, it would only produce 15% of all CO2. That leaves the other 85% coming from power generation, industry, domestic heating, road transport etc.. Although it is fair to ask the aviation industry to do its bit to reduce emissions, it is the WRONG TARGET if people really care about climate change. The best thing individuals can do to reduce their carbon footprint is drive less and insulate their homes properly, not fly less. OK, the Chancellor has picked on "gas guzzling" cars for more tax - but he's left alone all the old bangers out there, that produce much more CO2 than a modern 4X4, as the higher taxes only apply to new cars! It certainly makes you wonder what the taxes on aviation and cars are REALLY all about.

By Alastair Forbes, Thursday, March 13, 2008
Fiddling while the planet burns

As usual the avation indutry responds to the most timid of taxes with its rejectionist stance. Contrary to the claims made here, aviation accounts for at least 13% of emissions if all other gases are taken into account. In addition, aviation accounts for the world's fastest growing source of carbon dioxide emissions. Indeed, such is its contribution to emissions that the respected Tyndall Centre for Climate Change Research predicts that aviation's emissions alone will exceed the government's target for this country's entire output of greenhouse gases in 2050 by around 134% - not least due to the ongoing airport expansion programme being pushed by this government. Perhaps a tax is not the best way to reduce flights but what alternatives are the industry going to propose? This is not an ideological battle but rather one for the survival of our planet.

By Raoul Bianchi, Thursday, March 13, 2008
Naivety in the extreme

I am sure that if any one from HM Treasury read Travel Mole they would have a chuckle that a company with the name of "Cheapflights" was concerned that aviation is a prime and plump target for increasing taxes. Whilstever we present aviation as a cheap option then of course it will continue to be taxed over and above inflation rates. The environmental issue is a red herring as all HM taxes are paid to the general exchequer. What the industry needs to do is to get its house in order so that future Chancellors cannot use environmental excuses as a justification for further new taxes. And Cheapflights? Perhaps a change of name would help!

By Dick Sisman, Thursday, March 13, 2008